Friday, July 20, 2018

Claimant Reinstatement of Total Disability Post-Protz decision

Injured Employee Remedy for Reinstatement of Total Disability Status after the Pennsylvania Supreme Court decision in Protz

Synopsis

An injured employee may file a Petition for Reinstatement of total disability benefits after receiving 500-weeks of wage loss benefits for partial disability status pursuant to an Impairment Rating Evaluation (IRE).  The petition is timely if it is filed within three (3) years after the last payment of partial disability benefits.  The injured employee must prove that he/she is totally disabled.  Medical evidence is not required to meet this burden of proof.  Injured employee testimony alone may support a finding of total disability status. However that testimony must be found to be credible by the workers’ compensation judge. 

The reinstatement of total disability status is effective as of the date of the filing of the reinstatement petition. Note, the Commonwealth Court specifically stated this decision does not resolve the question of whether the Supreme Court decision in Protz would apply in the same manner to cases where the last payment of partial disability benefits was made more than three years before the filing of a reinstatement petition. 

See: Whitfield v. WCAB (Tenet Health System Hahnemann LLC) 608 C.D. 2017 filed June 6, 2018.

Whitfield Decision Review & Rationale

The Commonwealth Court decision reviewed the historical background of the litigation of the constitutionality of the impairment rating evaluation provisions.  The court reviewed its 2015 decision (Protz I), which found the impairment rating evaluation provisions were unconstitutional, as they were an improper delegation of legislative authority.  However, the Commonwealth Court preserved the IRE remedy and required utilization of the Fourth Edition of the AMA Guides, as that was the AMA edition in effect when the legislature enacted the Section 306(a.2) remedy.

The 2017 Supreme Court Decision, (Protz II) held the IRE procedure was unconstitutional, in its entirety, as a delegation of legislative authority and the offending language - reference to use of  "the most recent edition" of the AMA Guides - could not be severed, so as to preserve a remedy using the 4th Edition of the AMA Guides. 

The PA Supreme Court decision was silent as to the retroactivity of it's decision. 
Did this ruling apply only to cases which were pending on appeal? 
Did it apply to all IRE cases since 1996?

Post-Protz l - Commonwealth Court IRE decisions 

The Commonwealth Court reviewed decisions of the court issued post-Protz l and before the PA Supreme Court decision (Protz II). The value of this review is to identify prior case holdings and legal arguments which no longer apply in the assessment of IRE issues.

For example, in Winchilla the Commonwealth Court decided a worker could not proceed with an appeal to the challenge to the constitutionality of his IRE as the worker did not raise the delegation of legislative authority argument. 

In Riley the Commonwealth Court held the worker had a period of 60 days to appeal an IRE determination. Riley filed an IRE challenge in her appeal of a Review NCP petition, more than 10 years after the IRE determination. She waived her right to challenge the constitutionality of that IRE. (see also Gillespie l).

In Beasley, a worker could proceed with an IRE challenge, where the appeal of the change of the workers status was pending when Protz l was decided. When the worker raised this issue for the first time on WCAB appeal, this was held to be the first opportunity for worker to raise this issue.

In  Mazuruk the worker was in the process of appealing his 2012 IRE when Protz l was decided. That challenge was timely.

Whitfield - Factual Background

In Whitfield the worker was injured in 2002 and underwent an IRE in 2006.  The WCJ issued a decision to modify the worker’s disability status from total to partial as of the date of the IRE.  The Appeal Board affirmed that order.  The parties stipulated the issue of the constitutionality of the IRE procedure was not raised before the WCJ or WCAB by Whitfield.  There were no further appeals. 

Whitfield received her last partial disability benefit in July of 2015.  In November of 2015, just after the Commonwealth Court Decision in Protz I, Whitfield filed a Petition for Reinstatement to total disability status.  

WCJ denied the Reinstatement Petition reasoning: (i) the Protz I Decision did not expressly void all prior IREs or state that its decision applied retroactively; (ii) only pending matters were entitled to a benefit in the change of the law; (iii) constitutionality of the IRE process was not raised or preserved in the underlying litigation.  The WCAB affirmed the Reinstatement Petition denial, primarily based upon the argument that the injured worker did not raise a challenge to the constitutionality of the IRE.  The 2009 WCAB Order was not appealed to preserve those issues. 

In the Whitfield analysis, the Commonwealth Court did not rely upon its prior decisions - whether the claimant preserved the constitutionality issues or whether the claimant appealed the IRE Determination within 60-days (Riley).  The Court explained that their decisions predate Protz II, so they were decided before Section 306(a.2) was struck down in its entirety as unconstitutional.  “Thus, reliance on the time requirements set forth in Section 306(a.2) establishing when an IRE must be challenged has been undermined”. (slip op. p.18).

Thompson was one of the first cases decided by the Commonwealth Court after the Supreme Court decision in Protz II.  Thompson was in the midst of litigating the merits of her 2005 IRE change in status when Protz I was decided.  Although Thompson had not challenged the constitutionality of the IRE before the WCJ or WCAB, she did so in her Petition for Review to the Commonwealth Court.  The Court rejected arguments that Thompson should have barred from raising this issue on appeal, noting “claimant raised this issue at the first opportunity to do so”. Thompson 168 A.3d 412.

In Bradosky, claimant challenged the constitutionality of the 2012 IRE and continued to do so throughout the appeal process.  The Commonwealth Court reversed the WCAB decision and affirmed the WCJ modification of Bradosky status to total disability as he had preserved the constitutionality issue throughout the litigation. 

In Whitfield the Court began its analysis with a review of the Reinstatement petition Section 413(a) which states that a WCJ may at any time modify, reinstate, suspend, or terminate an NCP, Supplemental Agreement, or WCJ Order, upon proof that the disability of an injured employee has increased, decreased, recurred, or has temporarily or finally ceased… provided… a petition is filed within three years after the date of the most recent payment of compensation made prior to the filing of such petition.

Whitfield decision reviewed the two remedies of Section 306 to modify the benefit status of an injured worker.  The first is the earning power assessment remedy of Section 306(d)(2). This is based upon a change in earning power established via vocational expert evidence.  The second remedy was the IRE procedure at Section 306(a.2).  This change in status was made without regard to any change in the claimant’s earning power. 

As the modification of total disability status to partial disability status based upon an IRE was not based upon a change in earning power, there is no reason why the term “disability” in Section 413(a) governing the reinstatement from partial to total disability should be restricted to the traditional definition of earning power (Slip Opinion p.24) The court discusses this “earning power” distinction underlying these two remedies to support its analysis that a section 413(a) reinstatement should not be restricted to the “traditional” definition of earning power.

Post-Protz Reinstatement Burden of Proof

A significant element in the Commonwealth Court analysis is its analogy that the post Protz claimant seeking reinstatement of total disability benefit status is more akin to a claimant seeking reinstatement of benefits from suspension rather than the claimant seeking reinstatement of benefits after a termination.  

In the IRE case there was no allegation that the claimant’s disability had ceased.  The Supreme Court Decision in Latta was referenced for it's holding that a suspension status actually acknowledges a continuing medical injury.  This portion of the analysis is the set-up for the assessment of the claimant’s burden of proof in a Protz reinstatement.  “In situations where benefits were suspended a claimant is only required to demonstrate that the reasons for the suspension no longer exist”. Citing: Pieper.

A claimant is not required to demonstrate with medical evidence that the work related injury giving rise to the benefits continues, a claimant’s testimony to that effect satisfies the claimant’s burden of proof.  Citing: Latta. 

Once the claimant testifies that his/her prior work related injury continues, the burden shifts to the employer to prove the contrary.  Where an employer fails to present evidence to the contrary, the claimant’s testimony, if believed by the WCJ, is sufficient to support reinstatement. Latta.  In such suspension situations, the causal connection between the original work-related injury and the disability which gave rise to the compensation is presumed. Citing: Pieper, Emphasis in the original.

Does the Protz reinstatement claimant need to establish a worsening of their condition? 
In Stanek, the burden of proof - to be entitled to reinstatement of total disability after expiration of the 500-weeks of partial disability - is that claimant must show: (1) a loss of earning capacity and (2) a worsening of the claimant’s medical condition. 

In Whitfield, the Commonwealth Court distinguishes the general rule of Stanek.  In Stanek he did not have his disability status changed based upon an impairment rating evaluation rather Stanek received partial disability benefits based upon a change in his earning power.  After he exhausted his 500-weeks of partial disability, he sought reinstatement on the basis that his physical condition had worsened, rendering him totally disabled. 

Contrast that Stanek status with an IRE case, where a claimant’s change in disability status was never based upon a change in earning power or a change in physical condition, rather in an IRE, the change in status was based solely upon an impairment rating. “It makes little sense to require a claimant seeking reinstatement based upon an unconstitutional IRE to show a change in earning power when the employer was not required to show the same (change) when it had is had the claimant’s disability status modified from total to partial”.  (slip op. p.26)

In Whitfield the WCAB Order was vacated and the case was remanded to the WCJ to make findings of fact related to whether the claimant presented credible testimony that she is totally disabled.  The WCJ did not make any findings regarding credibility of claimant’s testimony as the WCJ Decision was based upon the applicability of Protz I.  In Whitfield claimant testified that she is totally disabled.  The employer presented no evidence to the contrary.  If claimant’s testimony is credited, claimant is entitled to reinstatement as of the date she filed her reinstatement petition (Slip Opinion p.27).

Commonwealth Court addressed the Whitfield Employer framing of the issues presented as involving the retroactivity of Protz II.

The Commonwealth Court dismissed the employer argument that “retroactive application” of Protz II would upset employer’s reasonable expectation of the finality of the prior IRE determination.  The court reasoned that claimant always had the section 413 remedy for modification/reinstatement while receiving benefits or recently concluded benefits, so long as the petition was filed within three years of the date of the most recent payment. This ruling does not upset the employer’s expectation of finality as the Act always provided a mechanism for claimants to seek modification pursuant to Section 413.

The Court reasoned that the issue presented in Whitfield is not truly a question of retroactivity.  “A retroactive law has been defined as one which relates back to and gives a previous transaction a legal effect different from that which it had under the law in effect when it transpired… a law is given retroactive effect when it is used to impose new legal burdens on a past transaction or occurrence”. Citing: Department of Labor and Industry.

“Our decision today does not impose any new legal consequences based upon a past transaction.  Simply because Protz II is being applied to a case that arose from a work injury and a change in disability status that predates it, does not mean it operates retroactively.  It would be retroactive if it related back and gave a prior transaction a legal effect different from that which it had under the law in effect at the time. (Whitfield)

This decision does not alter claimant’s past status.  Rather it gives effect to the claimant’s status as it existed at the time she filed her reinstatement petition, which was filed within the statutory framework for filing such petitions. (slip op. p 29).

Significantly, as noted in footnote 24, the Commonwealth Court stated “we do not resolve whether Protz II would apply to cases in which the last payment made was outside the three (3) year period in Section 413(a).

Additional Commonwealth Court applications of its Whitfield analysis.

Also decided on June 6, 2018 were two unreported decisions at:
 (1) Moore v. WCAB (Sunoco Inc.) and (2) Pavlack v. WCAB (UPMC South Side).
These two decisions apply the Whitfield analysis and remand the cases for findings by the WCJ.

These two cases are noteworthy as the Court rejected the Claimant argument that Protz ll should apply to ALL claimants who are receiving partial disability benefits following a change in status based upon an IRE.

In these 2 cases, there was no factual evidence presented below. Accordingly, the Court remand instructions in Moore and Pavlack are somewhat different from the remand instruction in Whitfield.

In Moore and Pavlack the remand orders directed the WCJ to hold an evidentiary hearing to determine whether Claimant’s work-related injury continues.

Query: What is the scope of the evidence to be presented at such hearing?


RECOMMENDATIONS:

1. These legal issues and arguments require individual assessment by experienced workers compensation counsel.

2. Initially (we have heard) the scope of evidentary hearing may vary before each WCJ.

3. Be proactive. Schedule a medical evaluation to assess the presence or absence of work-related disability. 

4. Is there work available within the physical capabilities of claimant? Was there work made available in the past?

5. Assess the evidence available to address the disability status of claimant since the date of the IRE evaluation or since the date of WCJ order directing the modification.

These legal issues will continue to develop as each "type" of IRE case is addressed. 






Tuesday, January 2, 2018

2018 PENNSYLVANIA STATEWIDE AVERAGE WEEKLY WAGE RATE


The Pennsylvania Department of Labor & Industry, Bureau of Workers' Compensation issued the following notice


Based upon the Statewide Average Weekly Wage, as determined by the Department of Labor & Industry ... the maximum compensation payable under the Workers' compensation Act ... shall be $1,025.00 per week for injuries occurring on and after January 1, 2018. 


For purposes of calculating the update to the payments for medical treatment rendered on and after January 1, 2018 , the percentage increase in the Statewide Average Weekly Wage is three (3) percent.

Tuesday, June 20, 2017

PA Supreme Court rules Impairment Rating Evaluation remedy is Unconstitutional!

Pennsylvania Supreme Court rules Impairment Rating Evaluation remedy is Unconstitutional!

Mary Ann Protz v. WCAB (Derry Area School District) (Pa. June 20, 2017)

The Supreme Court of Pennsylvania has ruled that the PA Work Comp Impairment Rating Evaluation remedy is unconstitutional, in its entirety.

Previously, the Commonwealth Court Decision approved the continuing performance of impairment rating evaluations (IRE), albeit pursuant to the Fourth Edition of the AMA Guides to the Evaluation of Impairment. (AMA Guides). That portion of the Commonwealth Court Decision has been reversed. The Commonwealth Court ruling that Section 306(a.2) violates the non-delegation doctrine of the Pennsylvania Constitution was affirmed.

In effect, there is no longer an Impairment Rating Evaluation remedy for the Employer and Insurer.

Factual and Procedural Background

The underlying facts and procedural history in the Protz case are straightforward. Protz sustained a work related injury in 2007. The school district voluntarily began paying total disability benefits. In October of 2011 Protz underwent IRE at the school district’s request. The IRE physician evaluated Protz and assigned a 10% impairment rating based upon the Sixth Edition of the AMA Guides. As her impairment rating was less than 50%, the school district filed a Modification Petition seeking to convert her status from total to partial. This Petition would limit the duration of wage loss benefits to a period of 500 weeks.

The Workers’ Compensation Judge granted the school district Modification Petition, as the whole body impairment rating was less than 50%. Protz appealed the WCJ Decision to the Workers’ Compensation Appeal Board and argued that the general assembly unconstitutionally delegated to the AMA the authority to establish criteria for evaluated permanent impairment. The Appeal Board rejected this constitutional argument and affirmed the WCJ Decision.

In the Commonwealth Court appeal, Protz again argued that Section 306(a.2) of the Act violates Article II, Section I of the Pennsylvania Constitution. The Commonwealth Court agreed. The Court held that: the General Assembly has the power to make laws, but it cannot constitutionally delegate that power to any other branch of government or to any other body. The en banc panel agreed with Protz that Section 306(a.2) requirement that physicians use the “most recent edition” of the AMA Guides violates Article II Section I. The reasoning is that the assessment of impairment is placed in the hands of “another body”. The AMA could (and did) change the Guides without consulting the PA General Assembly. In effect, Pennsylvania law would change without legislative review or action.

The Commonwealth Court declared Section 306(a.2) unconstitutional, only in so far as it proactively approved versions of the AMA Guides beyond the Fourth Edition, without legislative review. The Court preserved a portion of the IRE remedy and remanded the Protz case to the WCJ with instructions to apply the Fourth Edition of the Guides, which was the version in existence when the General Assembly enacted Section 306(a.2) in 1996.

The Supreme Court Decision

Both Employee and Employer appealed the Commonwealth Court decision.
Justice Wecht authored this plurality opinion. First, he reviewed the non-delegation issue. The school district argued that the General Assembly is free to adopt current and future standards that are published by a well recognized independent authority. Protz argued that Section 306(a.2) violates the non-delegation doctrine as it gives the AMA unfettered discretion over Pennsylvania’s impairment rating methodology.

At the heart of the non-delegation doctrine is the principle that the General Assembly cannot delegate “to any other branch of government or to any other body or authority” the power to make law. However, the Constitution does permit the General Assembly, in some instances, to assign authority in its discretion, to execute or administer a law. The Constitution imposes two fundamental limitations when the General Assembly acts in this matter. First, the General Assembly must make “the basic policy choices”. Second, the General Assembly must include “adequate standards which will guide and restrain the exercise of the delegate administrative functions”.

The Supreme Court reviewed its prior decisions regarding the non-delegation issue. The Court concluded the authority delegated to the AMA in Section 306(a.2) is even more broad and unbridled than prior statutes which were reviewed and held to have violated the non-delegation doctrine (citing West Philadelphia Achievement Charter Elementary School (Pa. 2016)).

The Supreme Court found that the General Assembly did not favor any particular policies relative to the AMA Guides methodology for grading impairments nor did it prescribe any standards to guide and restrain the AMA’s discretion to create such a methodology. The Court speculated that the AMA could concoct a formula which would yield an impairment rating guide which could deem nearly every claimant to be at least 50% impaired or to the contrary to deem that almost no one exceeds a 50% threshold or the AMA could concoct anything in-between those two extremes.

The Supreme Court noted that the General Assembly did not include any procedural
mechanisms within the Section 306(a.2 )which the court has previously considered essential to protect against administrative arbitrariness and caprice. For example, the General Assembly did not require the AMA to hold hearings, accept public comments or explain the grounds for its methodology in a reasoned opinion, which then could be subject to judicial review.
It is noteworthy that The Supreme Court cited several medical literature articles regarding the flaws in the AMA Guides, including a group of physicians who authored a chapter in the 5th edition Guides!

Now that the Court concluded “most recent edition language” is unconstitutional could the IRE remedy be preserved, based upon utilization of the 4th edition, which was the Guide available at the time the 1996 amendment?

Unfortunately the answer was a resounding “NO”.

The Supreme Court determined that the Commonwealth Court erred in remanding the Protz case to the WCJ with instructions to apply the Fourth Edition of The Guides. 

The Court rejected the argument that the Fourth Edition of The Guides was in existence at the time the statute was enacted and it could have been incorporated by reference by the General Assembly.

The Supreme Court rejected this analysis as the statute did not specifically require use of the Fourth Edition of The Guides; rather the statute required the use of the “most recent edition” of the Guides.
The Supreme Court rejected the argument that striking the unconstitutional “most recent edition” language would allow the remainder of Section 306(a.2) to remain an effective remedy. 

The Court concluded that removal of the offending language renders the remainder of Section 306(a.2) incomprehensible. This Section was viewed as a paradigmatic example of a law containing valid provisions that are inseparable from void positions. The Court concluded – we must strike Section 306(a.2), in its entirety.

Recommendations for Cases with Past Impairment Rating Evaluation Determinations

1.       Situations where you must issue a supplemental agreement to recognize the modification of partial status to total disability status –

                                I.            “Open Cases- currently  pending before WCJ, WCAB, and Commonwealth Court”

                              II.            “Cases with Impairment Rating Determinations within 500 week  period”

a)      Ask claimant for a settlement demand.
b)      Make a settlement offer.
c)       Schedule an IME, to obtain a current physical capacity opinion.
d)      Retain a Vocational Expert to interview claimant, to perform a labor market survey and to prepare an Earning Power Assessment Report.
e)      Contact the Employer. Can they make a modified duty (even part-time) job offer to Employee, to commence (re-start) the 500 week clock.
f)      Determine if claimant has “retired” or withdrawn from the work force.
g)      Determine if claimant is working.

2.       In situations where you it is uncertain that benefit status must be voluntarily modified

                                I.            Claimant already paid 500 weeks of partial disability benefit status

a)      Ask claimant for a settlement demand
b)      Make a settlement offer
c)       Schedule an IME, obtain physical capacity opinion


3.       PENALTY assessment  for violation of the Act

a)      Will be available in “open” cases, if timely modification is refused.
b)      Reasonable time to modify benefit status – 21 days from request (?).
c)       “Closed” cases- possibility of penalty is less likely, as there is a legitimate argument as to entitlement of modification – at this point

4.       ATTORNEY FEE assessment for unreasonable contest

a.       Will be available in “open” cases, if timely modification is refused and litigation is required.
b.      “Closed” cases- possibility of attorney fee assessment is less likely, as there is a legitimate argument as to claimant entitlement of modification of benefit status – at this point.
This analysis may change, as appellate caselaw develops.

WHEN IN DOUBT - REVIEW YOUR FILE WITH YOUR WORKERS' COMPENSATION ATTORNEY.


 Remember, these comments are not intended to be legal advice. Each case is unique and must be discussed at length, after you hire an attorney.


Friday, January 13, 2017

2017 Pennsylvania Workers' Compensation Maximum Rate

2017 Pennsylvania  Workers' Compensation Maximum Rate Announced

The Department of Labor Industry announced, based upon the statewide average weekly wage, as determined by the Department of Labor & Industry, the maximum compensation rate payable under the Pennsylvania Workers' Compensation Act, Article 1, subsections 105.1 and 105.2 shall be $995.00 per week for injuries occurring on and after January 1, 2017.

For purposes of calculating the update to payments for medical treatment rendered on and after January 1, 2017, the percentage increase in the Statewide Average Weekly Wage was 1.7 percent.

The maximum weekly compensation is $995.00.

Employees earning $746.26 to $1,492.50 will be paid at a rate of 66 2/3% of their earnings.

Employees earning $552.78 to $746.25 will be paid at a rate of $497.50.

Employees earning less than $552.77 will be paid at a rate of 90% of their earnings.

The correct calculation of the injured employee's average weekly wage may become complicated for a number of reasons:

  • bonuses; 
  • vacation pay;
  • profit sharing;
  • commissions; 
  • concurrent employment;
  • self-employment;
  • periods of layoff; 
  • limited duration of employment;
  • seasonal employment;
  • etc ...
Do not hesitate to contact your workers' compensation attorney to review any Average Weekly Wage and Benefit Rate questions.


Wednesday, December 28, 2016

Employers may seek reimbursement of Claimant Attorney Fees assessed for an Unreasonable Contest


Employers and Insurers may recover Claimant Attorney Fees assessed for an Unreasonable Contest, when reversing that award on appeal

The Workers’ Compensation Act allows a Worker Compensation Judge (WCJ) to award claimant attorney fees where there is an unreasonable contest of a petition. (See: § 440). The WCJ must make a finding as to the amount and the length of time for which such counsel fee is payable based upon the complexity of the factual and legal issues involved, the skill required, the duration of the proceedings and the  time and effort required and actually expended. (See: § 440(b)). 

In cases where a Workers’ Compensation Judge  awards  claimant attorney fees for an unreasonable contest and the Employer/ Insurer is successful on appeal to reverse that award - there was no clear legal precedent to require the claimant attorney to refund the unreasonable contest attorney fees, to which they were no longer entitled.

A recent decision of the Commonwealth Court of Pennsylvania has determined that the Employer and Insurer may request a WCJ order directing the claimant counsel to refund unreasonable contest fees, where Employer is successful on appeal to reverse that award. See: County of Allegheny v. WCAB (Parker) No. 82 C.D. 2016 and No. 112 C.D. 2016 filed on December 20, 2016.

Factual and Procedural History
In the underlying litigation, in 2007 the Employer filed a petition for suspension of total disability benefits payable for a 1993 shoulder injury. The Employer argued that claimant was offered and refused a job within his work restrictions. Employer also argued that claimant had voluntarily withdrawn from the work force. 

In 2008, the Workers’ Compensation Judge granted employer suspension petition, finding that claimant, who was 80 years old at the time, had failed to follow through in good faith on a job referral within his physical limitations from his shoulder injury. He had completely withdrawn from the work force as a result of his age and medical conditions unrelated to his work related shoulder injury.

Claimant appealed the WCJ 2008 order of suspension. On appeal,  the Workers’ Compensation Appeal Board (WCAB) 2009 decision reversed the suspension order on the basis that Employer was barred by the legal doctrine of collateral estoppel from requesting a 2007 suspension as an earlier 2004 WCJ decision had denied a prior suspension petition.  To add insult to injury, the WCAB held that claimant was entitled to unreasonable contest attorney fees and remanded the case for the WCJ to determine the amount of those fees. [Employer petitioned for review to the Commonwealth Court, but the petition was deemed premature due to the remand nature of the WCAB order].

On remand, as directed, the WCJ 2009 decision awarded claimant attorney fees for the litigation of the 2007 suspension petition. On Claimant and Employer cross-appeals back to the WCAB, the 2011 Appeal Board decision modified that WCJ order and directed the payment of additional counsel fees for the work performed in the claimant’s appeal from the 2008 WCJ suspension decision, in addition to the counsel fees for litigation of the 2007 suspension petition.

Employer filed a Petition for Review of the WCAB 2011 decision to the Commonwealth Court. Employer argued that the WCAB reversal of the 2008 WCJ suspension order was erroneous as a matter of law. The direction for assessment of unreasonable contest attorney fees for litigation of the 2007 suspension petition was erroneous as a matter of law. The assessment of additional counsel fees regarding claimant’s appeal from the WCJ 2008 suspension order was erroneous as a matter of law.

In the Employer appeal to the Commonwealth Court from the WCAB 2011 order, the Employer requested a supersedeas of compensation payments to claimant, including payment of attorney fees. The applications for supersedeas were denied by the Appeal Board and by the Commonwealth Court.  On this basis, employer issued payments, including claimant unreasonable contest attorney fees of $14,750.00.

In 2012 the Commonwealth Court reversed the WCAB 2009 and 2011 decisions. The Court ruled that the Employer’s 2007 suspension petition was not barred by the legal doctrine of collateral estoppel as the 2007 factual and legal issues were not identical to the issues presented in the 2004 WCJ decision. On this basis, the WCAB erred as a matter of law in reversing the suspension of claimant’s benefits directed by the WCJ 2008 decision. Claimant filed an Application for Allowance of Appeal to the Supreme Court of Pennsylvania, which was denied.

After the denial of claimant’s petition for allowance of appeal, Employer filed an application for supersedeas fund reimbursement with the Bureau. Employer requested: reimbursement of the compensation paid to claimant; attorney fees paid under the contingent fee agreement; the $14,750.00 paid in unreasonable contest attorney fees. The Bureau approved a limited reimbursement for the compensation paid to claimant and the contingent attorney fee agreement. The Bureau properly denied the employers reimbursement requests for the $14,750.00 in unreasonable contest fees, as such fees were not reimbursable under §443 of the Act.

As reimbursement was not available from the supersedeas fund, Employer filed the petition which is the subject of this appeal, seeking an order from the WCJ to direct claimant counsel to refund the $14,750 unreasonable contest attorney fees. 

The WCJ denied Employer’s petition, as there was no clear legal precedent for such an order requiring the return of unreasonable contest attorney fees.

The WCJ also denied claimant’s request for the imposition that additional unreasonable contest fees for the litigation of the employer petition, as this petition was filed in good faith, in regards to an unsettled legal issue.

The WCAB affirmed the WCJ decision.

Employer appealed to the Commonwealth Court.

The Commonwealth Court reversed.

The decisions of the WCJ and WCAB erroneously concluded that Employer could not recover the award of unreasonable contest attorney fees - which were required to be paid by the underlying WCJ & WCAB orders – where Employer was successful to reverse that decision on appeal.

Commonwealth Court reasoning
The Commonwealth Court relied upon its prior decision in Barrett v. WCAB (Sunoco Inc.)(Pa. Cmwlth. 2010) which held that an employer and insurer may request the reimbursement of litigation costs which were awarded and paid, where that award is later reversed on appeal. In Barrett the court concluded that allowing claimant counsel to retain the legal costs to which he is no longer entitled, would result in an unjust enrichment. As the employer cannot recover the legal cost awards from the supersedeas fund, the employer would be deprived of any meaningful appeal form an erroneous cost award.

The reimbursement of legal costs would not impose a hardship on the claimant, as the recovery was sought directly from claimant’s counsel not from the claimant. In review of its prior decision in Barrett, the court referenced two unreported decisions which reached similar results. See: Daniels v. WCAB (Giancarli Constr. Co.) and Lewis-Briggs v. WCAB (DPW).

Although, the prior decision in Barrett involved litigation costs, the court believed the reasoning in Barrett is equally applicable to the unreasonable contest attorney fee issue. Where the employer has been erroneously ordered to pay litigation costs, the WCJ can order claimant’s counsel to refund that overpayment. The decision in Barrett compels the conclusion that the employer is entitled to an order requiring claimant counsel to refund the $14,750.00 in fees that were erroneously awarded.

Each factor in Barrett was present in the instant case. The Commonwealth Court reasoned that the award of litigation costs and the award of unreasonable contest attorney fees are both pursuant to §440 of the Act. The § 440 language includes unreasonable contest attorney fees as one of the types of costs incurred in litigation.

Both costs are payments in addition to the award of compensation to the claimant. To order a refund involves no payment of compensation benefits and denying a refund would result in unjust enrichment.

The court reasoned that the lack of any other remedy to the employer is the same for the unreasonable contest attorney fees as it is for other litigation costs. The supersedeas fund reimbursement is limited to “payments of compensation”. Only indemnity wage loss benefits and medical expense reimbursements can be recovered by the employer from the supersedeas fund following a successful appeal. There is no recourse from the supersedeas fund for unreasonable contest attorney fees or other litigation costs.

The court rejected the claimant and amicus curiae arguments that unreasonable contest attorney fees should be treated differently from other litigation costs. The court noted claimant compensation payments were over $106,000 for a period when his benefits should have been suspended. Claimant counsel received a 20% contingent attorney fee payment and claimant received over $84,000.00. The employer’s petition for reimbursement of the $14,750 of unreasonable contest fees does not request or require claimant or claimant counsel to return any of the compensation benefits paid following the supersedeas denial.

The court rejected arguments that allowing retention of improperly awarded unreasonable contest attorney fees was necessary or appropriate for the protection of claimant’s rights to obtain compensation, to which they are entitled. “An order to return fees erroneously awarded for unsuccessful litigation does not reduce (claimant) counsel’s ability to recover unreasonable contest attorney fees for successful claimants who are entitled fees nor does it reduce the amount of the fees received where unreasonable contest attorney fees are validly awarded.” (Slip opinion at p.10).

The court distinguished claimant argument which referenced that  claimant’s counsel are entitled to retain the 20% contingent attorney fees despite the fact the claimants may  ultimately be unsuccessful in litigation. These fees have a difference origin. They are paid out of claimant’s compensation. They are subject to reimbursement by the supersedeas fund, where unreasonable contest attorney fees are not.

Employer did not waive its right to seek a refund of unreasonable contest attorney fees in the 2011 appeal to the Court from the WCAB decision. Employer was not required to obtain an order from the Commonwealth Court before filing a petition to the WCJ for a refund of unreasonable contest attorney fees. “Until this Court reversed the Board’s 2009 decision on September 18, 2012, Employer had no basis for filing a petition for refund”. (Slip opinion p. 12).

President Judge Mary Hannah Leavitt joined in this opinion.

Judge Cosgrove wrote a dissenting opinion. The decision in Barrett – to refund deposition costs paid to claimant counsel – does not provide sufficient support for the reasoning to allow refund of unreasonable contest attorney fees.  

PRACTICE POINTERS:

1. Review ALL litigation files where an adverse decision is REVERSED on appeal.
  •           If supersedeas was denied, prepare an application for reimbursement to the Bureau.       
  •      If litigation costs were paid to claimant counsel – request a refund.     
  •           If unreasonable contest attorney fees were paid – request a refund.

2. If claimant counsel will not voluntarily issue a refund – file a Petition to Review 
    Compensation with the Bureau.

QUERY: Does this new decision change one’s assessment of the necessity to file an appeal of an                 unreasonable contest finding?

In the past, one may have assessed the case and decided to forgo an appeal of the underlying claim issues - 

However, it may now be cost-effective to file an appeal of the unreasonable contest determination – as a refund is available.



Sunday, July 31, 2016

WCJ may reject unrebutted IRE medical expert opinion testimony

The Impairment Rating Evaluation (IRE) remedy allows the Employer and Insurer to attempt to limit liability for future wage loss benefits based upon a medical expert examination and opinion of impairment.
There are specific requirements to pursue the IRE remedy. The injured worker must receive 104 weeks of total disability payments. The Employer must file a request with the Bureau. The Bureau  assigns the request to a designated prequalified medical expert. An examination is conducted if the injured worker has reached maximum medical improvement.  
If the impairment rating is less than 50% based upon the AMA Guides to the Evaluation of Permanent Impairment (and the IRE request was made within 60days of the 104th week) the disability status of the worker "automatically" converts from total disability to partial disability of a duration of 500 weeks.
 If the IRE request is made more than 60 days after the 104th week, a petition to modify status must be filed and the traditional administrative adjudicatory process follows. 
In many cases, the only medical evidence introduced is the report of the IRE physician. In the absence of contrary medical evidence, the IRE petition is often granted.

What about the cases where the IRE physician opinions are unconvincing?

What are the employee legal arguments and remedies?

IA Construction Corporation v. WCAB (Rhodes) a decision of the Supreme Court of Pennsylvania authored by Chief Justice Saylor on May 25, 2016 addressed the validity of a workers compensation judge decision  to reject the opinion testimony of an IRE physician in the absence of contrary medical evidence.

Factual and Procedural Background 

Rhodes was injured in 2005 in a work-related motor vehicle accident. A WCJ granted a claim in 2007 for disability from  a traumatic brain injury with neck and back injuries. 
Several years later, Employer filed an IRE request and the Bureau assigned M. Bud Lateef MD a board certified specialist in Physical Medicine and Rehabilitation to conduct an evaluation. He assigned a 34% impairment based upon physical evaluation and application of the AMA Guides.  (6th Edition AMA Guides). 

Employer filed a petition to modify the employee disability status. Dr. Lateef testified he examined employee and confirmed 3 primary diagnoses: traumatic brain injury; cervical disc herniation; gait dysfunction from a spinal condition. Dr. Lateef assigned a discrete impairment rating to each diagnosis. Employee had reached maximum medical improvement. 
In the litigation of the Employer petition Employee did not testify. No medical testimony was presented on behalf of Employee. 
The Workers Compensation Judge denied the Employer modification petition and rejected the impairment rating of Dr. Lateef. The WCJ expressed a concern he "lumped " an array of discrete injuries, which were previously recognized in the WCJ claim petition decision,  into 3 categories. 
She believed his  cognitive injury assessment  was limited. Dr. Lateef was not a specialist in neurology. For these reasons the WCJ was unpersuaded by his opinion of the degree of impairment present. 

 A divided  WCAB affirmed the WCJ denial of the Employer petition, on the basis that the WCJ determines the credibility and weight assigned to the medical evidence. 

The Commonwealth Court reversed the WCJ denial of the IRE modification request.
The Court reasoned that Dr. Lateef met the statutory requirements for qualifications of physicians to conduct an IRE evaluation. He followed the methodology to conduct an impairment rating evaluation. The Court believed the WCJ lacked the authority to reject the medical expert opinion testimony on the basis that cognitive impairment was outside his area of medical specialty. This type of ruling would impose a standard in excess of those set forth in the statute.

Also the Court noted the WCJ findings must be based upon substantial evidence. For the WCJ to find the IRE is insufficient, there must be evidence in support of that finding. Here Employee produced no evidence. The WCJ did not reference any section of the AMA Guides in support of the conclusion that Dr. Lateef inappropriately grouped the injuries or erroneously calculated the impairment rating.

Supreme Court Decision reverses and reinstates WCJ rejection of medical evidence and denial of Employer Modification petition.
The Supreme Court reviews a number of critical points in the impairment rating evaluation procedure and remedy. As the Protz decision is pending the Court's consideration, regarding the constitutionality of the application of "subsequent" Editions of the AMA Guides (after the 4th Edition which was in effect at the time of the 1996 amendment), perhaps this section of the Workers' Compensation has gained the attention of the Court.

Here the Court considers the term "credibility" in its broadest sense, as a measure of the persuasiveness of the testimony. (as the medical witness testified via deposition, the WCJ did not assess his demeanor). The Court cites the often-recited principle that the WCJ is the fact finder and exclusive arbiter of credibility and evidentiary weight.

Pennsylvania does not apply an uncontradicted medical evidence rule in workers compensation cases. The decision below did not explain why there should be a departure from this long standing rule in our "traditional administrative process".

The substantial evidence rule does not apply to situations where the prevailing party did not present any evidence. Rather the focus is upon the weight afforded the evidence presented by the party with the burden of proof.

The Court agreed with the Employer's arguments that the WCJ explanations for her rejection of Dr. Lateef's opinions were unconvincing. There was no explanation how Dr. Lateef "lumping" of the medical conditions were inconsistent with the AMA Guides. However, the Court noted specific points where the medical evidence was lacking.

A WCJ may validly accord less weight to the underdeveloped out-of-specialty medical opinion testimony of the degree of impairment associated with a work-related traumatic brain injury, in the traditional administrative process.

PRACTICE POINTERS

1.   In IRE litigation, Employers and Insurers must consider the available avenues of attack of the IRE medical expert. It may be necessary to supplement the IRE report with an IME medical expert to buttress the weak points regarding diagnosis of conditions, assessment of MMI status, or application of the AMA Guides.

2. It is recommended to consider medical expert deposition testimony to explain, amplify and support the conclusions in the IRE report.

3.  As the WCJ will assess the "credibility" of the IRE medical evidence, we should consider supplementation of the evidentiary record with medical records of treatment, diagnostic test results and consultations which support the logic and reasoning of the IRE medical expert.






Wednesday, May 18, 2016

Workers' Compensation Insurer Reimbursement of Trauma Care - When 100% does not equal 100%

Workers' Compensation Insurer Reimbursement of Trauma Care.
The Pennsylvania Workers' Compensation Act requires the payment of reasonable and necessary medical expenses which are causally related to a compensable work injury.  In 1993, the Act was amended to allow reimbursement of medical expenses within a "fee cap" schedule based upon the Medicare reimbursement mechanism.  The Act was amended to provide for a utilization review procedure, whereby the Employer/Insurer could challenge the "reasonableness and necessity" of the medical treatment.  The 1993 amendments also allowed review of the timeliness or amount of the medical expense reimbursement via a medical fee review procedure

Medical fee disputes may arise in the context of treatment provided at an acute care facility to an injured worker with an immediate life-threatening or urgent injury.  These medical expenses are reimbursed at 100% of the usual and customary charge for these services, as they are not subject to reduction in amount by the medical fee cap provisions. 

Geisinger Health System and Geisinger Clinic v. Bureau of Workers' Compensation Fee Review Hearing Office (SWIF) is a reported decision of a panel of the Commonwealth Court authored by Senior Judge Pellegrini on April 21, 2016.  This decision examined the rate of reimbursement for treatment of a work-related injury at a trauma center for an acute, life-threatening or urgent injury. 

 Factual and Procedural Background

The facts in Geisinger were not disputed.  The employee was injured at work when a wooden board broke and lodged near his eye.  There is no dispute that the medical treatment was at a level one trauma center for life-threatening or urgent injuries.  The Provider submitted HCFA-1500 claim forms for payment of medical treatment by the Insurer.  Provider sought payment for services rendered in a level one trauma center at its usual and customary charges, i.e. its actual charges

The Insurer responded with an explanation of benefits letter (EOB) which recognized that treatment was provided at a level one trauma center for an immediately life-threatening or urgent injury; however, the EOB further stated that payment would be made: "as such usual, customary and reasonable rates for this geographic area have been utilized as the reimbursement methodology". 

Provider filed applications for Fee Review pursuant to Section 306(f.1) of the Act.  Provider sought reimbursement based upon its actual charges.  The Insurer did not reduce these charges to the medical fee cap schedule, rather insurer provided reimbursement based upon a usual and customary database at the 85th percentile.  

Medical Fee Review Section Administrative Review

After Provider filed the Application for Fee Review with the Bureau of Workers' Compensation, the Medical Fee Review Section circulated an administrative decision which concluded that the Insurer owed the provider an additional amount of reimbursement.  The Medical Fee Review section found the treatment met the criteria for reimbursement at an acute care or trauma facility.  Reimbursement was to be made at 100% of the actual charges of a provider

Insurer filed a request for hearing for review of the Medical Fee Review Section administrative decision.  At this hearing, Insurer submitted the testimony of the re-pricing manager of its third-party vendor.  The re-pricing manager testified regarding her familiarity with the Workers' Compensation Act and the Medical Cost Containment regulations.  She explained that in review of trauma cases, rather than applying the workers' compensation claim Medical Fee Cap Schedule, she applies the usual and customary information at the 85th percentile.  This information is obtained from the FAIR Health database.  

The re-pricing manager testified that she utilized this definition of "usual and customary charge" based upon the 2011 Statement of Purpose of Adoption of Usual and Customary Charge Reference posted by the Pennsylvania Department of Labor & Industry, such that effective November 1, 2010, fee review applications would be resolved by the Department utilizing the 85th percentile of the MDR (Market Data Retrieval) database, published by Ingenix to determine the usual and customary charges defined by 34 Pa. § Section 127.3.

 Hearing Officer Determination

The Hearing Officer found the testimony of the re-pricing manager to be credible, in its entirety.  The Hearing Officer reversed the medical fee review determination.  The Hearing Officer determined Insurer properly reimbursed Provider at 100% of the usual and customary charge for services in that geographic region for the services rendered to the injured worker. 

The Hearing Officer determination was based upon the conclusion that the insurer's payment to the provider should be based upon "100% of the usual and customary charge" as defined in 34 Pa. § Section 127.3 rather than 100% of the provider's actual charge.  The definition of "usual and customary charge" at 34 Pa. Code § 127.3 was "the charge most often made by providers of similar training, experience and licensure for a specific treatment, accommodation, product or service in the geographic area or the treatment, accommodation, product or services provided." 

The Hearing Officer further explained this determination by noting that Section 306(f.1)(10) of the Act clearly states that services rendered in the trauma center shall be paid at the usual and customary rate, not at the provider's usual and customary charge or at the provider's actual charge.  Regulations Section 127.128(a) and (b) reference the term "the usual and customary rate".  Admittedly, Regulations Section 127.128(c) references "the provider's usual and customary charge".  

The Hearing Officer reasoned that the language "the usual and customary charge" appears in three sections.  There is a separate definition for "actual charge".  This led the Hearing Officer to conclude that the purpose of the regulations was to ensure proper reimbursement at 100% of the usual and customary charge for the specific treatment rendered in the geographic area where that specific treatment was provided.  It is also the purpose of the regulation so as to prevent providers from charging excessive fees for treatment and services rendered to injured workers.

Commonwealth Court Appeal of Provider

Provider appealed the determination of the Hearing Officer to the Commonwealth Court.  The Court reviewed the decision and reasoning of the hearing officer and affirmed this decision. 

The Court rejected Provider's argument that it is entitled to be reimbursed for immediately life threatening or urgent injuries at a level I trauma center at 100% of their usual and customary charge, i.e. their actual charge

The Court reasoned that the trauma center exception in Section 306(f.1)(10) of the Act states that acute care provided in a trauma or burn center to injured workers with life-threatening or urgent injuries is reimbursed at "the usual and customary charge".  The term "usual and customary charge" appears in several portions of the statute and regulations.  The Court specifically referenced 306(f.1)(3)(i) and 34 Pa. Code § 102.

The term "usual and customary charge" is defined at Section 109 of the Act "usual and customary charge means the charge most often made by providers or of similar training, experience and licensure for a specific treatment, accommodation, product or service in the geographic area where the treatment, accommodation, product or service is provided.  (76 P.S. § 29).  The Court noted Section 127.3 of the Medical Cost Containment Regulations reflects the same terminology. 

In review of the statutory construction and interpretation of the language, the Court noted that one must take into consideration the context of the language.  The Court noted that one provision, Regulation 127.128(c) utilized the definition of usual and customary charge which was synonymous with the provider's actual charge.  However, the Court noted that when a regulation is at variance with the language of the statute, the regulation is ineffective to change the statute's meaning.  Under the Rules of Statutory Construction, a defined term is to be applied unless a different meaning can be ascribed to the word or phrase because of its context.

In this case, the Court found that there was nothing in the language of Section 306(f.1)(10) of the Act that indicates that the "usual and customary charge" language is different from the definition at Section 109 of the Act, where that term is defined as "the charge most often made by providers of similar training, experience …". 

The Court affirmed the Hearing Officer determination that "the usual and customary charge" is not the equivalent of "the actual charge" of a provider. 

This decision is significant in that it clarifies that the treatment at a trauma center for acute or life-threatening care is not reimbursed at 100% of the actual charge submitted by the provider.  The correct method of reimbursement is to utilize the 85th percentile of the usual and customary database.  As a practical matter, this clarification of the required reimbursement rates for acute care may result in significant savings,  where significant treatment has been provided. 

PRACTICE POINTERS:

  1. All Workers' Compensation Insurers must utilize an experienced individual (or vendor) to perform the medical expense review and re-pricing in all cases, including acute care provided at the trauma center for life-threatening or urgent injury.
  1. It is essential that a timely review is performed (within 30 days of the medical statement) and any request for a review by the Medical Fee Review Section is properly filed.
  1. Properly prepare the Explanation of Benefits (EOB) letter to the Provider consistent with Regulation 127.209.  When stating the reasons for changing the Provider's codes or reimbursement, provide a detailed written explanation.
  1. Confirm that the Provider has properly and timely filed an Application for Fee Review.  The application must be filed no more than 30 days following notification of a disputed treatment or 90 days following the original billing date of the treatment, which is the subject of the fee dispute, whichever is later.
  1. A Provider or Insurer has the right to contest an adverse administrative decision from the Medical Fee Review Section.  The contest of the administrative decision and request for hearing must be filed within 30 days of the date of the decision in the fee review.
  1. Appeal of the Hearing Officer Medical Fee Review Determination is made to the Commonwealth Court.  An appeal must be filed within 30 days of the mailing of the Hearing Officer determination.